Re: Japan/recent decisions

[Massimo De Angelis <massimo@xxxxxxxxxxxxxx>]

On Fri, 22 Sep 1995, Gernot Kohler wrote:

> How are others on this list reacting to the recent decisions by Japan to
> lower interest rates to 1/2 of 1% and to stimulate demand with a $190 bln
> package (which is on top of prior demand stimulation packages)?
>
> 	In my view, this invalidates the Marxist claim that ruling
> classes are incapable of implementing Keynesian policies at the present time.
>
Not completely.

There is a big difference between once in a while expansionary policies
and systematic Keynesian policies. As James Galbraith says, Reagan and C.
have always practiced NIMB Keynesianism (not-in-my-budget). Systematic
Keynesian policies require a shift in the major target of economic policies
from inflation to full employment. But for this shift to occur
in the mind of international policymakers and "bureacracies", that is,
for full employment to become again the central problem of economic
orthodoxy and policy, you need to satisfy a non-small condition: guarantee
social peace at the point of production. You can have systematic Keynesian
policies only when you have convinced policymakers, bureacracies,
industrial and financial elites that full employment (or its promise)
is not going to hurt "discipline in the factory" - to say it
with Kalecki - and more in general, "discipline in society". To do that
they need to see in place institutions that they believe are
able to contain and control such a possibility. I do not see any of
these institutions around yet.

In the old times it was the bureacratic
apparatus of the trade unions to serve as a means to displace
grassroots demands. Now, with the very low degree of union representation
and the structure of the new labour markets, full employment
policies would be of great use for the workers but of very little
use for the elites. Besides, we are not witnessing a widespread
international movement against unemployement yet, this being another
very convincing "argument" which was used in the 1930s and 1940s..


Massimo De Angelis
University of East London
Massimo@xxxxxxxxxxxxxx